European antitrust regulators must
avoid “political interference” as they rule on a proposed
merger between Germany’s Deutsche Boerse AG (DB1) and NYSE Euronext,
U.K. Treasury Minister Mark Hoban said in the text of a speech.

NYSE, based in New York and operator of stock markets in
Paris, Amsterdam, Lisbon, Brussels and the U.K.’s derivatives
exchange, and Deutsche Boerse appealed directly to European
Commission President Jose Barroso last week to try and salvage a
merger, arguing a European Union ban would harm the continent’s
exchanges and drive business away.

Regulators from EU Commission told the two companies they
plan to prohibit the deal to create the world’s largest exchange
because it would monopolize derivatives trading in the region,
according to two people on Dec. 30.

It is vital that the regulator “lives up to those duties
in the weeks and months to come without political
interference,” Hoban will say in a speech at the London Stock
Exchange today, according to remarks released by his office. “I
fully understand nonetheless that the Commission faces a huge
challenge to resist pressure to delay, obfuscate and pander to
vested interests in the EU.”

Competitors and customers have lobbied regulators to stop
the merger, which would create the world’s largest exchange.
NYSE Euronext (NYX)’s Liffe derivatives market, based in London, is
Europe’s second-largest futures exchange and agreed on a deal
with Euronext in the face of one from the LSE.

“We see the Commission as parties in our commitment to
protect and promote the single market in financial services, to
meet its responsibility to secure regulation in the interest of
all 27 members of the EU,” said Hoban in the text, adding that
“the London Stock Exchange has always been the beating heart of
the city.”

Hoban also said in the published remarks that the region
can’t afford to impose a financial transaction tax unless it’s
applied globally. A unilateral tax could cut European gross
domestic product by as much as 3.4 percent, or 422 billion euros
($536 billion), he said.

“Without global consistency, those transactions covered by
the tax would merely relocate to countries not applying the
tax,” he said in the speech.

Last week, the German Finance Ministry said the nation’s
goal remains to introduce a financial transaction tax in all 27
European Union countries.